WA power caps to blame: Sims

Rod Sims
has criticised the energy policies of the former West Australian Labor government, now in opposition and electioneering on energy prices.

The chairman of the Australian Competition and Consumer Commission said a decade of unsustainable price caps had hurt consumers and created an uncompetitive market. “That just creates pressures everywhere for the whole system," Mr Sims told The Australian Financial Review.

“Trying to catch up the price increases that have been missed out for 10 years and then build for growth with the need for further increases to do that is a very unfortunate pressure."

Power prices are one of the key issues in the lead-up to the March state election, and Labor’s assault on the cost of living has been a major factor in the party’s turnaround under leader
Mark McGowan
, who took up the position in January.

WA Labor launched an advertising campaign last weekend focusing on the cost of living. Households have been subjected to a 62 per cent jump in power prices since the Colin Barnett-led Liberal government took office in 2008, as prices have risen to reflect the actual cost of power generation.

The former WA Labor government oversaw the capping policy although the then Liberal opposition did, at one stage, insist on a tariff freeze.

WA’s energy utilities are still heavily subsidised and tariffs need to rise another 25 per cent before they reflect the cost of power production. Energy retailer Synergy has a legislated monopoly on the sale of electricity to most WA households.

Mr Sims said the capping policies and the way that the state’s Western Power Corporation was broken up in 2006 had manifested itself in a lack of competition.